UK Equities Tumble Amid New U.S. Tariffs and Oil Price Decline

UK shares fell due to new U.S. tariffs impacting global markets and declining oil prices affecting energy stocks. The FTSE 100 and FTSE 250 indices dropped, fueled by fears of reciprocal tariffs. Defence stocks rose with increased spending, while companies like Ashtead and Greggs faced challenges.

UK shares mirrored a global downturn on Tuesday as newly imposed U.S. tariffs took effect. The FTSE 100 index dipped 0.3% by 1100 GMT, slipping from a record close, while the FTSE 250 slid 0.8%, hitting a seven-week low. The U.S. applied a 25% tariff on imports from Mexico and Canada, doubling duties on Chinese goods to 20%.

This tariff move sparked concerns over retaliatory measures, contributing to a worldwide equity slide. Meanwhile, oil and gas shares faced a 3% decline, marking a monthly low after OPEC+ opted to continue its April oil output hike. Shell stocks declined post-announcement of an executive team overhaul, whereas defence stocks marked a seventh session of gains.

Defence sector optimism surged as UK finance minister Rachel Reeves advocated for expedited equipment procurement and the European Commission unveiled a significant defence spending plan. Precious metal miners saw a 1.1% rise due to gold's increased appeal as a safe haven. Notably, Ashtead's shares declined by 4.8% on unmet profit forecasts, while Greggs fell 11% after slowing sales. Conversely, Abrdn rose 11% following strategy changes, and Intertek's shares increased 7% after raising margin expectations.